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The Need for Sophisticated Insurance Agents in Advanced Manufacturing
Times have changed. We’ve seen a new era of technology usher in incredible advances in business operations, as well as changes in consumer behavior and expectations. Advanced manufacturing, or the use of innovative technology to improve existing processes and products, has led to the creation of electric vehicles, 3D printing, and drones. Likewise, advanced manufacturing has also contributed to impressive forward strides in robotics, medical devices, defense technology, and biotech.
Because advanced manufacturing organizations have unique risks, they can require the sophisticated expertise of insurance agents to help ensure their organization is properly protected.
Advanced Manufacturing’s Unique Risk Factors
The type of products advanced manufacturers produce typically have the following characteristics, according to Monroe Engineering:
- User experience and design play a large factor in their production
- Complex and superior technologically compared to their counterparts
- Are innovative and cutting-edge
- Solve a variety of common problems faced by the user and society in general
In my experience in the insurance industry, working with advanced manufacturers is particularly exciting because they make really cool products! I have a client who makes air conditioning systems custom-made for vintage automobiles, while another client develops parts for F15 fighter jets. And, if you think that’s cool, I have another client that is developing a new 3D printing process to produce heart valves! These companies are truly changing the game across several industries. They are manufacturing and developing precise and highly technical products. They distinguish themselves as world-class operations by focusing on workplace safety, precision, and following proper processes and protocols.
Related Reading: The Benefits of Forming a Workplace Safety Committee
Because advanced manufacturing businesses tend to focus on safety and precision, their risk is very well managed. Likewise, employees at advanced manufacturing organizations tend to be well-educated and highly skilled. These things make underwriters feel more comfortable writing policies for these companies because they trust their operating procedures—because in general, they operate through advanced technology.
Complex Risk
Even though advanced manufacturers tend to have a lower risk profile in the eyes of insurance underwriters, they still have complex businesses with complex risk profiles. According to our partners at Chubb, businesses in the advanced manufacturing categories listed below should consider the following:
- Technology: In the technology industry, financial injury due to a product defect or failure to perform services under contract could be a potential exposure.
- Aviation: Businesses in the aerospace engineering industry need a policy that features product liability insurance and insurance for aerospace component manufacturers of non-critical aviation products.
- Defense: If your company develops and/or manufactures products for the U.S. government, your insurance policy should cover combat-related products to non-critical aircraft products for military use.
- Clean Technology: Research and development and commercialized component part manufacturers need insurance coverage that supports clean technology, including a policy that addresses lost milestone payments and costs for prototype replacement.
- Medical Devices: Businesses that produce medical devices often require innovative insurance solutions tailored for manufacturers of software-driven medical devices.
Companies that manufacture sophisticated and highly technical products need an experienced insurance representative to ensure their businesses are covered. When you’re developing cutting-edge products and processes, your company needs an agent who has robust product and industry knowledge; is familiar with the type of risk that your organization may experience; and will get to know the intricacies of your business and understand exactly how it runs and operates.
A good insurance partner’s job is not just about providing coverage. They should also provide risk management assistance with contracts, help you navigate OSHA concerns, and understand the unique cybersecurity risks that impact companies producing complex technological and computer-driven products.
For more information about how SWBC can support advanced manufacturers, click here.
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InsuranceBrett Morgan
Brett Morgan specializes in alternative risk transfer programs, professional liability, Directors & Officers liability, and employment issues centered on protecting clients’ assets. He has an extensive background in understanding property exposures and a customer’s business processes. Brett has taught various seminars on business interruption, protecting your company while conducting business in foreign countries, and protecting your client’s internal controls from theft.
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